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Despite Switch, Mexico City’s Lights Flicker

José Martínez, left, serving tacos by candlelight recently during another Mexico City blackout.Credit
Jennifer Szymaszek for The New York Times

MEXICO CITY — The lights have been going out all over this city. Food rots in tepid refrigerators. Computer screens pop and fizzle out. At a taco stand in Iztapalapa, José Martínez sticks a candle in a Coke bottle and serves hungry customers by its glow.

In some cases, switches appear to have been deliberately turned off — evidence, officials say, that a few of the fired workers have taken matters into their own hands.

“This is a deliberate action to bother and affect consumers,” said Estefano Conde, a spokesman for the Federal Electricity Commission, the state-owned company that has taken over the service. “They want to generate pressure, to give the idea that we can’t handle it.”

Whether or not they are driven by sabotage, if the cuts persist, they could turn public opinion against Mr. Calderón’s agenda. He won broad approval for acting against the powerful electricity workers’ union, and many Mexicans now want him to move against other entrenched interests in business and labor that experts say stifle the nation’s economic growth.

First, though, he must prove that he can deliver on his promise to get the electricity company working. The government has argued it had no choice but to shut the company: it was spending twice what it earned in revenues, costing the government more than $3 billion a year in operating losses while outraging consumers with dismal service.

So far, consumers have seen little improvement. The skeleton crew of 3,500 people operating the company can barely cope with the usual problems in the ancient network, let alone sabotage.

The disbanded company, Luz y Fuerza del Centro, provided power to about 25 million people in Mexico City and surrounding states. The Federal Electricity Commission, or C.F.E., served the rest of the country, about 75 million customers, and has now become a national monopoly.

Critics say the decision was really aimed at crushing the company’s powerful union, the Mexican Electricity Workers’ Union, one of the country’s most combative. Other large public-sector unions, like the one at C.F.E., offer tacit support for the government and labor peace in return for substantial benefits.

But the electricity workers have been strong critics of the government’s conservative economic policies and have reliably provided thousands of protesters for antigovernment demonstrations by left-wing parties.

The government blamed the union’s escalating demands for the company’s deficits, and said the union had failed to live up to promises to improve productivity. The union’s leader, Martín Esparza, says the company was inefficient because successive governments had failed to invest in it.

And red ink was not solely the union’s fault: a union inspection identified some $450 million in unpaid bills owed by large corporations and other users.

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“Those who support and those who are against it are united in one thing: both want to see more actions in the same direction,” wrote María Amparo Casar, a political scientist at CIDE, a Mexico City research institution, in the newspaper Reforma last week. “More decisiveness to put an end to other business and union privileges, other unproductive businesses, other abuses, other corruption.”

Mr. Calderón has said he plans to take on the powerful interests he says are shackling Mexico’s development. In his state of the nation address last month, he said that Mexico needed deep change, promising in broad strokes to reform the education system and the telecommunications industry.

But then he sent hundreds of police officers in riot gear to seize the electric company, and hinted he might do more. “Today we have to change what doesn’t work in the country, because there are no other options, because time and resources are running out,” he said in a televised address the next evening.

Luz y Fuerza was low-hanging fruit. The workers earned about double what their private-sector counterparts do, said Maria Cristina Capelo, an analyst at CIDAC, a research institute here. Meanwhile, consumers fumed as they waited hours for repairs to lines, lined up before unstaffed counters at branch offices, or arrived home to find a worker shutting off the power for nonpayment of a bill that never arrived.

To disarm the union’s street protests, the government is paying an average of two and a half years’ salary in severance and promised to rehire some of the workers.

But shaking up other sectors may be more difficult. Education reform, for example, risks antagonizing the powerful teachers’ union, which provided crucial support for Mr. Calderón in the 2006 presidential election.

Opening up the monopolistic telecommunications industry means taking on Carlos Slim Helú, the wealthiest man in Mexico (and a major shareholder and creditor of The New York Times Company), whose companies have a near-lock on the nation’s land lines and cellphones.

If Mr. Calderón is to have a shot in those areas, he will need strong public backing. But Ms. Capelo warned that his support could erode quickly if the blackouts continued and service did not improve. “This is a very big risk,” she said. “The government and the C.F.E. should be paying a lot of attention. They have a month, two months maximum. This is the only thing that will allow them to maintain support.”

Many analysts say that Mr. Calderón must take on business interests next to show that his move against the electric company was about more than union-busting.

In a column in Reforma entitled “And now, what else?” the financial journalist Enrique Quintana suggested that Mr. Calderón could find ways to strengthen competition in telecommunications, such as by allowing more foreign investment in fixed-line companies, posing a challenge to Mr. Slim’s companies.

Mexicans are watching expectantly. “Calderón has opened a Pandora’s box,” Ms. Capelo said. “Now people are asking him to continue. There are lots of groups that paralyze the country.”

A version of this article appears in print on October 26, 2009, on Page A10 of the New York edition with the headline: Shutting Mexico City’s Power Company Is No Cure Yet for Bad Service. Order Reprints|Today's Paper|Subscribe